China New Coal Approval Cut Signals Transition Shift: Report

China’s new coal capacity approvals this year have been significantly fewer than last year’s, according to a report by the Finland-based Centre for Research on Energy and Clean Air. This signals the country's determination to bet more on wind and solar.

“With new renewable energy build-outs now capable of meeting all incremental power demand in China, the need for new coal is waning, and there are signs the central government may be embracing this change,” CREA said as quoted by Reuters.

A report by Greenpeace East Asia released earlier this week found that new coal capacity approvals had declined by close to 80% in the first half of the year from a year ago. The amount of new capacity approved during the period stood at 10.3 GW, the report said.

Wind and solar capacity, meanwhile, has had the biggest share of new additions, the Greenpeace report also found, noting that the total installed capacity of the two alternative generators topped the total installed capacity of coal in China, at 11.8 TW compared with 11.7 TW for coal.

“This economic powerhouse has transformed clean energy from a climate policy component into a cornerstone of China's broader energy and economic strategies,” the Centre for Research on Energy and Clean Air said.

Even so, the share of coal in China’s energy mix is still the biggest one, at 71% as of 2023. This is a modest decline from 73% ten years ago, and this year there have been further declines, with the biggest so far booked in May, when coal only accounted for 53% before rebounding to 65% in July.

While CREA is quite certain that the decline in new coal capacity is a signal of a pivot to wind and solar, Greenpeace is not so sure.

“Are Chinese provinces slowing down coal approvals because they've already approved so many coal projects during this five-year plan period? Or are these the last gasps of coal power in an energy transition that has seen coal become increasingly impractical? Only time can tell,” Greenpeace East Asia project lead Gao Yuhe told Reuters.

By Irina Slav for Oilprice.com

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